I expect a major breakthrough for the economy and banking activity in H2 of 2017: Abu ElFotouh

Hossam Mounir
2 Min Read

Vice chairperson of the National Bank of Egypt (NBE) Yehia Abu ElFotouh said that he expects a major breakthrough for the economy and the activity of the banking sector in the second half (H2) of 2017.

He explained that some challenges may continue in the first half (H1), but added that those will turn with the beginning of H2. “This is when the positive impact of the economic reform measures begins to appear,” he added.

He noted that H2 of 2017 will see influx of foreign exchange resources, supported by inflow of foreign direct investments, more remittances from Egyptians abroad, return of tourism, and hike in export rates. “This would reflect on the activity of banks, as any growth in an economy impacts banks,” he said.

Abu ElFotouh pointed out that there have been good signs on the return of foreign direct and indirect investments, which would also reflect on the performance of banks, whether through increasing their foreign exchange resources, or through increasing their investments in new projects.

As for the NBE’s plan for 2017, he said that the bank intends to focus on three main aspects: supporting small- and medium-sized enterprises (SMEs), expanding in the financing industry to support local production, and encouraging exports, which would reflect on easing pressure on hard cash.

Furthermore, Abu ElFotouh said that the NBE will not limit the amount of funds it channels to support these sectors, but will put in as much money as possible.

The NBE had secured financing of EGP 7bn at an interest rate of 5% to micro and small enterprises across 8,000 clients, as part of the initiative posed by the Central Bank of Egypt (CBE).

The bank aims to develop a strategy through which it could boost the size of SMEs financing to EGP 72bn over four years, according to Abu ElFotouh.

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